Houses are starting to become more affordable in Canada again. This is largely due to 2 factors, 1) house prices are dropping in Toronto, and 2) the thriving job market has led to an increase in wages in the country. But Canada’s housing market is not out in the clear yet. The growing interest rates, and thus mortgage rates, have been keeping home costs high and affecting the housing market in large cities like Toronto and Vancouver. But new legislation is creating tax hikes for foreign buyers, which is projected to lower housing prices in Vancouver.
- After almost three years of low housing affordability, Canada is starting to see improvement in their housing costs.
- If the rise in wages continues in Canada, it will likely keep the costs of housing low in cities like Toronto and Vancouver.
- New taxes on foreign buyers and property owners who are not living in British Columbia are said to presumably lower housing prices in Vancouver this year.
The National Bank of Canada’s home affordability measure fell 0.2 points in the fourth quarter of 2017, meaning that an average mortgage on a representative home was slightly cheaper than it was a quarter earlier.
“The countrywide fourth-quarter wage growth of 5.7 percent annualized was the strongest in more than three years,” National Bank economists Matthieu Arseneau and Kyle Dahms wrote.
Mortgage rates have risen about 0.58 percentage points since the middle of 2017, Arseneau and Dahms said.
But the new provincial budget, tabled this week, increased the foreign buyers’ tax to 20 percent from 15 percent, and introduced a speculators’ tax on properties owned by people who don’t live in British Columbia, assessed at two percent of the home’s value.
View the original article at Huffington Post